South Africa's consumer inflation is expected to moderate to 5.2 percent in July, helped by a drop in fuel prices as global oil prices eased that month.
Sixteen economists saw inflation in Africa's biggest economy braking to 5.2 percent in July, below the top of the Reserve Bank's 3-6 percent target band. The July data is due out on Wednesday.
In June, annual consumer inflation slowed more than expected, easing to 5.5 percent from 5.7 percent in May.
However, on a month-on-month basis inflation is seen quickening to 0.6 percent in July from 0.2 percent the previous month.
“The significant 87c/litre drop in the petrol price in Gauteng in July, on the back of lower international oil prices, will also provide welcome relief,” said Elize Kruger, an economist at Kadd Capital. The province of Gauteng includes the cities of Johannesburg and Pretoria.
The Reserve Bank unexpectedly cut the benchmark rate by 50 basis points to a record low of 5.0 percent, citing a weaker economic outlook.
The Bank said inflation was expected to continue to moderate over the next few quarters, reaching a low of 4.9 percent in the second quarter of 2013.
Thereafter it expects inflation to remain fairly stable around the 5 percent level to the end of 2014 although it has mentioned that the upside pressure to inflation could emanate from food prices.
The US drought has driven corn prices to historic peaks, and maize and wheat futures in South Africa are near record highs. - Reuters